Centre clears Model Tenancy Act to boost rental housing

Tribune News Service

New Delhi, June 2

The Centre today approved the “Model Tenancy Act” for circulation among the states and Union Territories (UTs) with assemblies for adoption by way of enacting fresh legislations or amending existing rental laws suitably.

Noting that this will help overhaul the legal framework with respect to rental housing across the country and minimise the “trust deficit”, the government, in an official release, said the decision was taken at a meeting of the Union Cabinet, chaired by PM Narendra Modi, today.

The government said, “The model Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country. It will enable creation of adequate rental housing stock for all income groups, thereby addressing the issue of homelessness. This will enable institutionalisation of rental housing by gradually shifting it towards the formal market.” It said the Act would facilitate unlocking of vacant houses for rental purposes and is expected to give a fillip “to private participation in rental housing as a business model” for addressing the huge housing shortage.

It is a fact that the rental housing market in the country has been struggling to find a balanced position in the real estate space. Apart from demand issues, tenant-landlord conflicts have been rampant, which added to the challenge in the absence of adequate legislative framework.

“Some key features of the Act revolve around conflict resolution, security deposit, vacating premises, increase in rent and tenancy agreement. The proposed law is set to streamline the roadmap for states to follow laws and policy as per tenant and owner sentiments,” said a senior government official.

2-month security for residential property

• Renting of premises to be only through a written agreement
• Needs to be submitted to rent authority on dedicated portal
• Maximum security deposit of two-month rent in case of residential premises, six-month for non-residential premises
• Complaint/appeal disposal by rent court/tribunal in 60 days
• Tenant to pay rent even during pendency of dispute
• No eviction of tenant during tenancy period
• Jurisdiction of civil courts barred
• New provisions not to affect existing tenancies